Cobell Settlement Final, Supreme Court Denies Appeals

Published on Nov 20, 2012

The $3.4 billion Cobell v. Salazar settlement is final and will soon go into implementation. All appeals have been exhausted, with the U.S. Supreme Court denying review in both Craven v. Cobell and Goodbear v. Cobell. Both appeals had challenged the commonality, or similar injuries, among class members. The Settlement will resolve many longstanding disputes over the federal government's mismanagement of Individual Indian trust funds and resources, and was approved by Congress with significant tribal support along with a debate over the details.

Details about the Cobell Settlement

The Settlement will distribute:

$1.5 billion to pay individual Indian trust beneficiaries, including:

Stage 1 - Trust Accounting - $1000 per beneficiary

Stage 2 - Trust Resource Mismanagement - payments vary -each individual Indian trust landowner will receive a resource mismanagement payment of a base amount (likely close to $800) plus a formula amount based on the average of theindividual's ten highest IIM account balances between 1985 and 2009. The resource mismanagement payment could range from the base amount to over $100,000, depending on historical account balances. The resource mismanagement settlement included an opt-out, but the time for opting out has passed.

$1.9 billion for addressing fractionation of individual Indian land. Small fractionated interests will be purchased from Indian landowners on a voluntary basis, and the consolidated land will be turned over to tribes under the terms of the Indian Land Consolidation Act. This is a very significant benefit to tribal governments that will alleviate problems of fractionated ownership and benefit Interior's land management system. The BIA has indicated that it is working to prepare appraisals for as many as 37,000 allotments - those with more than 20 owners. A recent update from the Interior Department on their plans for land consolidation can be found here. The Interior Draft Plan for land consolidation can be found here. A recent presentation on the Land Consolidation program from Chickasaw Nation Industries can be found here. NCAI's comments requesting more details on the plan can also be found here.

Up to $60 Million for Indian Higher Education - the funds are derived from land consolidation transactions and serve as an incentive for fractionated landowners.

Secretarial Commission on Indian Trust. The Commission is already functioning and is intended to make recommendations on the future of trust reform and to oversee a performance audit of trust systems and controls. Click here for more information.

For more information on the Cobell Indian Trust Settlement, you can go towww.indiantrust.com or call 800-961-6109.

Consumer Protection for Recipients of Indian Trust Settlements

There is an urgent short term need to provide financial and consumer protection information to tribes and Native individuals. Two settlements with payments going to Native individuals and a large group of tribal trust fund settlements are scheduled to be distributed in 2012 and 2013.

The Cobell settlement initial $1000 payments may be sent as early as December 2012 to an estimated 400,000 Native individuals. The Keepseagle settlement checks of $50,000 to the majority of Indian farmer and rancher class recipients were mailed in August and September 2012. Tribal trust fund settlements were made to more than 50 tribes earlier in 2012 with payments to the tribes - and determination of how these funds will be used - still being made. These settlements total at least $3 billion in individual and tribal trust fund settlements that either has or will come to Indian Country by mid-2013. For more information on these settlements, go towww.ncai.org/ProtectNativeMoney.

Tribal Leaders Can Help Protect Tribal Members

Tribal leaders should anticipate the arrival of Cobell settlement funds to tribal members in the near future, and NCAI is encouraging a focus on financial education and consumer protection. A major number of the recipients are in Montana, North and South Dakota, Idaho, Washington, California, Arizona, Oklahoma, Nebraska, and Minnesota. We anticipate, based on prior experience, that Native people will be targets of scams, theft and predatory practices.

To assist tribal leaders with information and resources they can make available to their members, go to www.ncai.org/ProtectNativeMoney. Information resources include: a letter to tribal leaders with useful information on the Cobell Settlement; a two page "consumer alert" that tribal leaders can send to their tribal members, post on their website or distribute at tribal and community events, an update on all the settlements, a list of frequently asked questions, and a list of resource documents about consumer protection and financial education.

NCAI is also receiving requests from tribes that have or are receiving tribal trust fund settlements. A number of the more than 50 tribes that have recent settlements either have already or will be distributing a portion of their settlement on a per capita basis. NCAI, working with other resource organizations is prepared to help individual tribes with information to help them alert their tribal members to consumer protection tips and think about longer-term financial education. A growing number of tribes have some type of financial education programs to help their members manage their money - and to protect their money.